VN footwear exporters told of shift in orders
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Manufacturers urged to cash in amid recent increases in overseas demand
Vietnamese leather and footwear exporters must become more competitive to capitalise on a shift in demand from China to Vietnam, experts from the Vietnamese Ministry of Industry and Trade advised.
They were addressing recent increases in orders made with Vietnamese producers from countries such as Japan, amid negotiations for the Trans Pacific Partnership (TPP).
Noting that foreign importers were shifting orders of leather and footwear products from China to Vietnam, they urged Vietnamese companies to improve their competitiveness on the global market.
Vietnam is finalising its participation in the TPP and is negotiating free-trade agreements with countries in the European Union to attract further investment to the leather and footwear industry.
Ho Thi Kim Thoa, deputy minister of industry and trade, said Vietnam would aim to bring modern technology and prominent brands to the domestic industry.
The Vietnam Leather and Footwear Association (LEFASO) said importers of prominent leather and footwear products on the world market were planning to shift their orders from China to Vietnam to capitalise on cost and labour advantages. It said Vietnamese exporters were aware of the opportunities due to this shift.
However, Dang Van Chien, director of the Hung Yen Footwear Joint Stock Company, said the trend was merely a “signal” and that foreign importers had only visited Vietnam to conduct market research.
Many enterprises have said challenges still remain in attracting foreign orders to the sector, noting that high taxes, production costs and limited capacity need to be addressed first.
Currently, 80 per cent of footwear exporters in Vietnam are engaged in only partial production, with limited capacity to deliver key aspects of end-to-end production, including design.
Domestic producers were also said to suffer from poor management and inadequate investment in new technologies.
Chien said this made it difficult for enterprises to predict trends and demand in foreign markets.
He urged the government to support training programmes that would improve the quality of the labour force and attract more foreign partners.
Diep Thanh Kiet, LEFASO’s deputy chairman, said enterprises should review their market strategies, improve their competitive advantages and build regions specialising in the production of raw materials.
In the first seven months, the value of Vietnam’s footwear export jumped 15.6 per cent year on year to US$4.79 billion (Bt154 billion).
